A federal incentive program has brought car buyers back to dealer showroom by offering big rebates designed to take gas guzzlers of the road. Now the U.S. Senate must decide whether to raise another $2 billion to keep the program in business.
We hope someone is keeping track of the vehicles being traded in under the successful ”˜cash for clunkers’ program. It would be interesting to find out the nation’s top clunker.
It will probably turn out to be among America’s best selling models of just a few years ago. The top-selling Ford F-150 pickup may be a candidate ”“ in 2003, the brawny 8-cylinder model achieved only 15 miles per gallon.
But for fuel-wasting inefficiency, it will be hard to beat sport-utility vehicles. Six years ago the then-popular Chevrolet Trailblazer also got only 15 mpg, and its mileage hasn’t improved much in the years since then.
But that’s history. Yesterday’s clunkers are money in the bank to automakers today. Customers who can drive their guzzlers to a dealership’s lot are eligible for a rebate of up to $4,500 on the purchase of a more fuel-efficient vehicle.
The government program, combined with dealership promotions and advertising, at last opened the pocketbooks of American consumers. Additional incentives by manufacturers created deals that were irresistible to qualified customers.
Unfortunately, this category does not include those who are frugal and environmentally responsible. Those who do not own a gas guzzler could only watch in envy as owners of big SUVs cashed in.
Unfair it may be, but the Cash for Clunkers boom restored some hope in the auto industry. Dealers say it’s a complicated, poorly-managed program ”“ and they’re delighted with it. Increased sales have also pumped up auto financing and advertising.
The rise in sales will be reflected in the next round of economic statistics and, with luck, the Cash for Clunkers program will be remembered as a benchmark of the 2009 recovery.
Congress originally set aside $1 billion to get more inefficient vehicles off the road, and another $2 billion may soon be devoted to the effort. Critics see reasons to doubt the effectiveness of the program, and claim that it’s hurting the markets for used cars and recycled steel. There may be other unintended drawbacks as well.
The biggest problem is apparent to all: Like other stimulus projects, the clunker splurge must be financed by the ever-growing federal deficit. As successful as it has been in spurring spending, soon the economy will have to rely on purchasers willing to pay the manufacturer’s recommended list price.
— Questions? Comments? Contact Kristen Schulze Muszynski or Nick Cowenhoven at 282-1535 or kristenm@journaltribune.com or nickc@journaltribune.com.
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